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Often referred to as a pay earner’s plan, Chapter 13 Bankruptcy lets those with consistent income design a strategy to pay back all or some of their debt. It offers a means of keeping essential assets, making up missing mortgage or auto payments, and arranging money. Those who commit to a repayment schedule—usually over three to five years—should choose this kind of bankruptcy to catch up on past-due payments free from immediate asset liquidation pressure.
Chapter 13: Bankruptcy
Chapter 13 Lawyers in Las Vegas lets debt be reorganized using a payback plan typically spanning three to five years, unlike Chapter 7 Bankruptcy, which sells assets to pay off debt. Those who wish to prevent foreclosure on their houses would notably benefit from this kind of bankruptcy as it helps them to make up missing mortgage payments over time.
How Does Bankruptcy Chapter 13 Work?
When you seek Chapter 13 bankruptcy, you give the court a proposed repayment schedule outlining how you want your debts paid back over time. Usually paid from your disposable income, the court must authorize this plan. Creditors cannot initiate or maintain collecting activities throughout the payback term. You pay a trustee monthly; she divides the money among your creditors per the plan. Any residual dischargeable debt is eliminated after the payback term.
When Will You Be Eligible?
You must have a consistent income that lets you make payments under the suggested payback schedule to qualify for Chapter 13 bankruptcy. You also have restrictions on the total amount of secured and unsecured debt you may carry. Periodically changed to reflect inflation, these levels are as follows: Before declaring bankruptcy, you must also submit income tax returns covering the past four years.
Why Would One Seek a Bankruptcy Petition?
Chapter 13 bankruptcy filing might have various advantages. It lets you retain your house and other assets, which may be in danger should you file for Chapter 7 bankruptcy. Under the protection of the automatic stay—which keeps creditors from pursuing collection efforts throughout the bankruptcy process—it also offers a chance to catch up on missing payments over time. Clearing some unsecured debt after the payback schedule may also help control unmanageable debt, lower stress, and produce a more reasonable financial state.
The Bottom Line
For those with regular income battling large debt who want to protect their possessions and make up for missed payments, Chapter 13 Lawyers in Las Vegas might be a reasonable choice. See an experienced bankruptcy attorney for more specific directions to your circumstances.
